High penetration of residential photovoltaic (PV) units has caused severe voltage issues in the distribution feeders. During seasons with low demand and high PV generation, distribution feeders face increasing power quality issues. Continuous operation in system conditions with these voltage issues reduces the lifetime of distribution equipment and can cause severe monetary loss. Legacy VAr support devices are too sparse and slow to mitigate these issues. With the introduction of the IEEE 1547-2018 standard, Distributed Energy Resources (DERs) are allowed to participate in providing VAr support to mitigate these issues. This paper proposes a novel Unified Mode Selection (UMS) framework within a real-time VAr optimization tool for distribution networks. This tool is developed based on an effective unbalanced distribution AC Optimal Power Flow (ACOPF) formulation. The proposed model has the ability to select between the Volt-VAr and Watt-VAr operational modes for each VAr enabled smart inverters, and to simultaneously optimize the controller set-points to optimally dispatch each inverter, minimizing operational costs and mitigating the voltage issues. The tool is tested on a snapshot of a distribution network in Arizona and compared against using only Volt-VAr or Watt-VAr operational mode with default settings. The results confirm the effectiveness of the model.